Reserve Bank keeps interest rates on hold as the ASX breaks records… but governor warns of more hikes
The Reserve Bank of Australia has kept interest rates on hold at 4.35 per cent, with the decision bringing relief to millions of homeowners in the country.
The announcement saw the ASX reach a record high on Tuesday.
RBA Governor Michele Bullock revealed the cash rate could still be raised in the future as Australia continues to grapple with high inflation.
‘The Board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if upside risks materialise,’ she said.
Ahead of the interest rate announcement, Australia’s share market inched higher on expectations the Reserve Bank would hold the cash rate steady, while US-Iran woes prompted an oil price bounce.
The S&P/ASX200 rose 20.3 points by midday, up 0.21 per cent, to 9,252.3, as the broader All Ordinaries gained 18.8 points, or 0.2 per cent, to 9,442.9.
The move followed a weak session on Wall Street overnight, after crude prices jumped to their highest price since July as US-Iran relations further deteriorated.
‘(US President Donald) Trump lashed out at Iran’s demand for compensation, saying he would seek payment from Iran for all the people it has killed and wounded – a demand Iran almost certainly will never accept,’ Westpac economist Mantas Vanagas said.
Ahead of the interest rate announcement, Australia’s share market inched higher on expectations the Reserve Bank would hold the cash rate steady, while US-Iran woes prompted an oil price bounce
‘Trump’s comments sent oil prices higher again, making investors more nervous about inflationary pressures ahead of Wednesday’s key US CPI report.’
Only four sectors were in the green by midday, led by a 3.7 per cent push in energy stocks as Woodside, Santos, coal producers and refinery operators rallied and Brent crude surged to nearly $US88 a barrel.
Miners continued their recent rally, as gold hit two-month highs of $US4,430 ($A6,275) an ounce, lifting the metal’s local sub-index 2.3 per cent.
Mega miners BHP and Rio Tinto continued their steady climb as copper and iron ore futures rebounded, bringing BHP to $64.29, less than $2 short of its record high.
Financials stocks fell 0.4 per cent, tracking with weakness in the big four banks and major insurers.
The health care sector is trading at its highest value since March, as investors leaned into big names like CSL, Pro Medicus and ResMed after a tough 10 months for the segment.
Consumer staples and real estate stocks trailed the other sectors, dipping 1.1 per cent each as Coles and Woolies faded and as ANZ tipped a deeper pullback in home prices.
In company news, NAB chief operating officer Les Matheson and technology boss Patrick Wright have announced their retirements, with their roles to be reallocated to other executives.
Ahead of the interest rate announcement, Australia’s share market inched higher on expectations the Reserve Bank would hold the cash rate steady, while US-Iran woes prompted an oil price bounce (stock image)
Stokes family-controlled SGH had more than a tenth of its value wiped after an earnings miss, despite lifting its full-year bottom-line net profit more than 30 per cent to $689.2 million.
California-headquartered tracking app provider Life360 tumbled more than 13 per cent after an earnings miss, despite growing second quarter revenue by almost 40 per cent to $US159 million ($A225 million).
The Australian dollar is buying 70.58 US cents, down slightly from 70.66 US cents on Monday at 5pm AEST.
